Student loan repayment thresholds

If you began your course after 1 September 2012 in England or Wales, you’ll have a Plan 2 loan. You’ll begin paying off your student loan when you earn over £25,000.

If your course started before 1 September 2012, or you have a loan from the student finance agencies in Northern Ireland or Scotland, you’ll have a Plan 1 loan that you’ll pay back when you earn over £18,330.

Repayments after you graduate

Repayments are made automatically through the tax system and stop once you’ve paid off your student loan in full.

You’ll repay your loan whether you’re:

an employee

self-employed

overseas.

It’s important to understand exactly what’s involved in student loan repayments so you can manage your monthly budget properly.

If your income falls below the starting threshold within a certain month, there won’t be a repayment deduction made for that month.

Once the loan is paid off in full, HMRC notifies your employer and the repayments stop.

However, if any payments slip through before your employer takes action, you’ll be refunded.

You should keep track of monthly deductions and contact the Student Loans Company if overpayments happen.

If you’re self employed

If you’re self-employed, HMRC will calculate what you owe each year in repayments, once you file your tax return.

Just make sure that you tick the box on your tax return which states that you currently have a student loan.

If you’ll be overseas

If you’ll be overseas for three months or more and your repayments have already started, you need to submit an Overseas Income Assessment Form which will work out how much you need to repay while abroad.

Repaying your student loan more quickly

You have the right to pay off your student loan more quickly by making single payments of £5 or more directly to the Student Loans Company whenever you want to.

You can do this even if your salary doesn’t yet reach the starting level for repayments.

You also have the right to pay off your outstanding student loan in full at any time.

If you do make voluntary repayments, this will not prevent your employer from making the usual student loan deductions from your pay. But it does mean that repayments will stop sooner.

Before making extra payments, you should consider first of all if you can make better use of this money to meet your budgeting needs now.

Welsh loan cancellation

If you took out a maintenance loan from Student Finance Wales under Plan 1 in academic years 2010/11, 2011/12, 2012/13 and 2013/14 or under Plan 2 on or after academic year 2012/13, the Welsh Government might provide you with a partial cancellation of up to £1,500.

The reduction will be applied to the balance of your student loan by the Student Loans Company when you start repayments.

If you can prove that you’re permanently unfit for work, then the Student Loan Company will also write off your student loan. The Student Loans Repayment site has the full details on how to prove this.

Budget now to manage your student loan repayments

Work out your incoming and outgoings on our quick-and-easy Budget planneropens in new window.

Whether you’re due to start university or preparing to graduate in the near future, the moment will come when you’ll start to make student loan repayments.